Risk Management in Construction Projects

Abstract

Risk is involved in every business and construction industry is no exception. Risk in terms of safety, economy and timely completion are more crucial for a project to be a successful one. Indian construction industry is worth about $100 billion and this could grow considerably driven by major projects across the country. The demand for infrastructure is going to be in great volume in the coming future. Use of modern construction equipments and techniques has accelerated the growth. As the industry grows the associated risk also grows. Risk management in construction is one important area that needs attention for successful completion of the project. A risk free project is one that results in a zero dispute situation so that there is a reasonable profit for the parties involved in a project. A well-drafted, balanced contract with a proper administration can mitigate exposure to risk and keep the project on track. Construction Managers need to know how to balance the contingencies of risk with their specific contractual, financial and organizational requirements. In order to achieve this balance, proper Risk identification and Risk analysis is required. The objective of the paper is to study the aspects that are more vital for the success of the project and highlight those pitfalls that increase the risk of the project. It is also attempted to arrive at some suggestions by referring to various cases and their judgments delivered in the past.